Value Added Tax (VAT)

Order Management supports different types of taxation policies, including sales tax and value
added tax (VAT). Sales tax is the tax paid on products and services in countries such as the
United States and is quoted separately from an item price. VAT is an indirect sales tax paid
throughout the European Community and European Free Trade Association (EFTA), among other
nations, but not the United States. Unlike sales tax, VAT is included as part of the item
price. VAT rates vary by country or region. The VAT authorities of individual countries
decide on the rates to be imposed on different goods and services. In addition, there are
also certain rules for specific products and services. VAT appears in the currency of the
locale.

Note: In Canada, three types of sales taxes are levied:
Provincial sales taxes (PST), levied by the provinces. Goods and Services
Tax (GST), a value-added tax levied by the federal
government.

Order Management shows VAT and sales tax information at the line item and order level. To control
this display, configure the taxation policy in merchant price books in Salesforce B2C Commerce. The
taxation policy determines whether product and service prices are treated as net or gross
prices. This treatment affects the display of prices and tax amounts in the Order Management
user interface as follows:

Net price: the price of the item, excluding tax. Net price is for sites using the USA
sales tax, for example. Tax amounts are considered separately from line item prices and
order subtotals. The price and tax information is stored as separate elements in the order
object.

Gross price: the item price and order subtotal including
associated tax. The Tax total field shows the word Included
instead of the tax amount. Single orders containing multiple items can
be charged VAT at different rates.

Example

Domestic U.S. sales use the net policy, where a customer service representative (CSR) refers to a
price plus tax. European sales use the gross policy, where a CSR would quote a price
inclusive of tax. For example, if an item costs $10 plus 5% sales tax, a U.S. CSR would say
that "the price is $10 plus tax." When describing a similar item that costs 10 Euros plus 5%
VAT, a European CSR would say that "the price is 10.50 Euros."

Tax processing

Tax Processing

Order Management retrieves pricing and VAT or sales tax details from B2C Commerce for Website
orders. When creating an order, adding an item, or exchanging an item, the pricing and VAT
or sales tax details are retrieved via web service calls.

For price changes, appeasements, returns, or cancellations, the item price, tax, and promotion
data are not retrieved from B2C Commerce. In these cases, taxes are calculated and prorated
based on the price and tax data that was stored when the order was captured. For a price
change or appeasement, the CSR can manually adjust the tax amount based on the price
adjustment.

User interface pages and customer-facing documents, such as invoices, quotes, emails, and
templates, show the price and tax values according to the taxation policy. When customizing
templates, the item extended price, shipping costs, handling costs, subtotal, and tax amount
can be shown.

When browsing
items in Customer Service Center, the Item Price field is calculated as
follows:

Net tax policy: unit price

Gross tax policy: unit price + tax

When browsing items under gross tax policy in Customer Service
Center, the item detail doesn't indicate that tax is included in the
shown price. The CSR must be aware of the tax policy.

The following considerations are important.

Each order record includes an indicator that specifies whether the
tax policy on the order is net or gross. This indicator can be
accessed via an API call or directly in the database, but isn't
visible on the user interface pages.

Discrete insurance charges are not supported.

Any additional charges, such as for gift wrap, must be included as
part of the handling charge.

Amazon and eBay connectors support VAT.

Shipping and handling charges on an order cannot be overridden in the Shipping Manager.
They can be adjusted in Order Manager and in Invoice Manager.

The tax information is visible in Order Details.

The tax amount on an order can only be adjusted in Order Manager
and Invoice Manager.

The tax amount on an order can only be adjusted when exchanging an
item.

The tax rate on an order can only be adjusted at the order level
or when exchanging an item.

The tax information is included at both the item and order level when printing quotes
and orders.

Scenarios: Value Added Tax (VAT)

Scenario: create and view item and order details in Customer Service Center
when VAT is used

A customer in France calls to place an order that consists of two dresses and
two books. Both items come from the same merchant. Both items are gift wrapped.
Because VAT is used for product and service taxation in France, the item prices
include VAT. The customer service representative (CSR) must add the items to the
cart from the appropriate merchant catalog. As each item is added, the item price
and VAT information are retrieved from B2C Commerce. The CSR must review the item
and order-level details with the customer.

Action

The CSR performs the following steps to process the
customer order, which uses VAT:

In Order Management Customer Service Center, click
New Order.

On the order entry page, search for and locate the
customer.

Click the Info tab and select the currency
(Euros) and locale (French – France) for the
order.

Click the Cart tab and add the items to the cart. The
item prices retrieved from B2C Commerce are shown. The item price includes the
VAT and duties.

Click the Shipping tab and select the shipping method,
which shows the shipping cost that was retrieved from B2C Commerce.

Click the Payments tab and select the
payment method.

Click the Review tab on the Order details page
and review the Item and order details with the customer. For
each item reviewed, specify that taxes are included in the
item price. For the subtotal of the order, specify the
following:

Subtotal: total price of all items including price adjustments + tax, but
without shipping or handling

Price Adj: total of order-level price adjustments

Shipping: total shipping amount + tax on the
shipping

Handling: total handling amount + tax on the
handling.

Note: The gift wrap cost is included in the
handling cost.

Tax: shows the word "Included" instead of
the tax amount.

Order total: subtotal extended price - total
order price adjustments + total shipping + total
handling.

To submit the order, click Submit Order.

The item and order-level price and tax information are
also shown on the invoice, emails, pack slip, and any other
customer-facing documents.

A customer in France calls to place an order and uses a _15% off your order_
promotion. The CSR expects that Order Management retrieves the pricing, shipping,
and VAT information from B2C Commerce and adjusts the price and tax to reflect the
promotion.

Action

The CSR performs the following steps to process the
customer order, which uses VAT:

In Order Management Customer Service Center, click
New Order.

On the order entry page, search for and locate the
customer.

Click the Info tab and select the currency
(Euros) and locale (French – France) for the
order.

Click the Cart tab and add the items to the cart. The
item price retrieved from B2C Commerce is shown. The item price includes the VAT
and duties.

Enter the promotion code. B2C Commerce validates it.

Click the Shipping tab and select the shipping method,
which shows the shipping cost that was retrieved from B2C Commerce.

Click the Payments tab, select the payment
method.

From the Review tab on the Order details page,
and review the Item and order details with the customer.
Confirm that the price and tax amounts were adjusted to
reflect the promotion discount.

The item and order-level price and tax information also
appear on the invoice, emails, pack slip, and any other
customer-facing documents.